Iron ore and steel prices continue to fall

Steel prices traded on June 16, 2022 on the Shanghai Exchange, fell, with rebar prices falling for the fourth consecutive session, on concerns that the rainy season will slow construction activity in China, which has been affected by Covid-19 restrictions.
On the Shanghai bourse, the price of rebar in October 2022 fell 2.5% to CNY 4,547 (US$676.76)/ton. Hot rolled coil prices fell 1.8% and stainless steel fell 1.3%.
At the same time, the price of iron ore for September 2022 on the Dalian bourse fell 3.2% to 867 CNY/ton, after touching 866.5 CNY/ton - the lowest since May 30, 2022.
Iron ore futures for July 2022 on the Singapore Exchange fell 3.6% to 128.4 USD/ton.

The reason for this drop was concerns that the rainy season would slow down construction activity in China, which has been affected by restrictions related to the COVID-19 pandemic.
The data showed signs of economic recovery in China last month provided some "consolation" to the ferrous market in the world's largest steel producer.
“Many regions in China have entered the rainy season, and this affects activity at construction sites,” said analysts at Sinosteel Futures. As a result, already weak capital demand is likely to continue to decline.”
The downward outlook for steel demand in China also pulls down the prices of steel production inputs.

Specifically, on the Dalian Commodity Exchange, the price of coking coal fell 2.7%, and the price of coking coal fell 1.4% on the same day of the survey.
Despite the drop in demand, China's crude steel output rose 4.1% in May from a month earlier, as COVID-19-related disruptions across the country eased. decrease.

VINANET/VITIC/Reuters